EMPLOYMENT
      TERMINATION AGREEMENT

    


    This
      Employment Termination Agreement (the “Agreement”) dated as of July 1, 2008 (the
“Effective Date”) is entered into between vFinance, Inc. (the “Employer”) and
      Leonard J. Sokolow (the “Employee”) (collectively, the “Parties”).

    


    RECITALS:

    


    A. The
      Employee is employed as Chairman and Chief Executive Officer of Employer
      pursuant to an Amended and Restated Employment Agreement dated November 16,
      2004, as amended on May 12 and December 29, 2006 (the “Employment Agreement”);


    


    B. Upon
      the
      merger with a wholly-owned subsidiary of National Holdings Corporation
      (“National”), the principal office of the Employer will be relocated to New York
      (the “Merger”); 

    


    C. Pursuant
      to the terms of the Employment Agreement, as a result of the Merger of National
      and the relocation of the principal office of the Employer, Employee would
      be
      entitled to a lump sum payment of One Million One Hundred and Fifty Thousand
      ($1,150,000) in cash as of the effective date (“Effective Date”) of such merger;


    


    D. The
      Parties have agreed that the Employment Agreement shall be terminated and
      replaced with a new employment agreement with National of even date herewith
      (the “New Employment Agreement”).

    


    NOW,
      THEREFORE, the Employer and Employee agree as follows:

    


    1. Termination
      of Employment.
      The
      Employee shall resign from his positions as Chairman and Chief Executive Officer
      of the Employer and the Employment Agreement shall terminate as of the Effective
      Date. From and after the Effective Date, neither party has or will have any
      right, liability or obligation arising under the Employment
      Agreement.

    


    2. Payments.
      

     

    (a) Salary
      and Bonus.
      On the
      Effective Date, the Employer shall pay to the Employee all salary and all
      accrued payments due and payable to the Employee on the Effective Date pursuant
      to the terms of the Employment Agreement. 

    


    (b) Triggering
      Event Payment.
      The
      Employer shall pay to the Employee the principal sum of $1,150,000 on the
      Effective Date. 

    


    3. Waiver
      of Acceleration of Derivative Securities.
      Notwithstanding the fact that in accordance with the terms of the Employment
      Agreement, as of the Effective Date, all Employer stock options held by Employee
      would otherwise become immediately and fully vested, Employee hereby waives
      such
      acceleration of Employer stock options and acknowledges that in connection
      with
      the Merger such stock options shall be exchanged for stock options of National
      at the applicable exchange ratio of the Merger (the “Exchanged Options”).
      However, in the event Employee is terminated by National with cause or Employee
      voluntarily resigns from National for any reason, all Exchanged Options shall
      become 100% vested and shall remain exercisable by the Employee or his
      beneficiaries for a period of nine (9) months from the date of such event;
      provided, however, such period of nine (9) months shall not exceed the earlier
      of the latest date upon which such options could have expired by their original
      terms under any circumstances or the tenth anniversary of the original date
      of
      grant of such options. Notwithstanding anything contained in the New Employment
      Agreement to the contrary, the terms of this Section 3 shall control with
      respect to the acceleration of the vesting terms of the Exchange Options in
      the
      event of Employee’s termination of employment from the National.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4. Taxes.
      If any
      of the payments under this Agreement or any other agreement, including the
      acceleration of derivative securities pursuant to Section 3 of this Agreement
      (the “Payments”),
      will
      be subject to the tax (the “Excise
      Tax”)
      imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
      “Code”)
      on the
      Employee, (or any similar tax that may hereafter be imposed) the Company shall
      pay to the Employee an additional amount (the “Gross-Up
      Payment”)
      in a
      manner consistent with Section 6(i) of the New Employment
      Agreement.

    


    5. Indemnification.
      In
      accordance with and subject to Employer’s corporate bylaws, Employer recognizes
      its continuing duty to indemnify, defend and hold Employee harmless to the
      fullest extent of Delaware law for any liabilities that may arise as a result
      of
      any acts taken by Employee (including, without limitation, the failure to take
      action) in the course of performing his duties for Employer. In addition, in
      accordance with Employer’s corporate bylaws, Employer shall pay any expenses
      (including reasonable attorneys’ fees), judgments, penalties, fines,
      settlements, and other liabilities incurred by Employee in investigating,
      defending, settling or appealing any action, suit or proceeding in advance
      of
      the final disposition of such action, suit or proceeding. Employer shall
      promptly pay the amount of such expenses to Employee, but in no event later
      than
      ten (10) days following Employee’s delivery to Employer of a written request for
      an advance pursuant to this Section 5, together with a reasonable accounting
      of
      such expenses. 

    


    6. Release.
      Simultaneous with the execution and delivery of this Agreement, the Employee
      shall deliver a release in favor of the Company substantially in form and
      substance identical to the release attached as Exhibit B to the New Employment
      Agreement.

    


    7. Severability;
      Entire Agreement; Governing Law.
      In the
      event any provision hereof becomes or is declared by a court of competent
      jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
      in full force and effect without said provision. If any court refuses to enforce
      any part of this Agreement as written, the court shall modify that part to
      the
      minimum extent necessary to make it enforceable under applicable law, and shall
      enforce it as so modified. This Agreement represents the entire agreement and
      understanding concerning Employee’s separation from Employer. This
      Agreement supersedes and replaces any and all prior agreements, understandings,
      discussions, negotiations, or proposals concerning Employee’s relationship with
      Employer.
      This
      Agreement may only be amended in writing signed by the Employee and an executive
      officer of the Employer. This Agreement shall be governed by the laws of the
      State of Florida, without regard to its conflict of laws rules. Each Party
      hereby irrevocably submits to the exclusive jurisdiction of any Federal or
      state
      court sitting in Palm Beach County, Florida for the adjudication of any dispute
      arising out of or relating to the Agreement and the transactions contemplated
      hereunder, and hereby irrevocably waives, and agrees not to assert in any
      proceeding relating to this Agreement, any claim that he or it, as the case
      may
      be, is not personally subject to the jurisdiction of any such court, or that
      any
      such proceeding has been commenced in an improper or inconvenient forum.


     

    
      
         

      

      
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    8. Attorneys'
      Fees.
      In the
      event any dispute or litigation arises hereunder between any of the parties
      hereto, the prevailing party shall be entitled to all reasonable costs and
      expenses incurred by it in connection therewith (including, without limitation,
      all reasonable attorneys' fees and costs incurred before and at any trial or
      other proceeding and at all tribunal levels), as well as all other relief
      granted in any suit or other proceeding. As used herein, a party shall be deemed
      "prevailing" when it recovers (i) as to a damages claim, an aggregate of more
      than fifty percent (50%) of the damages which it seeks among its various
      asserted claims exclusive of interest, attorney's fees, costs incurred and
      exemplary damages and (ii) as to an equity claim, substantial injunctive or
      other equitable relief upon its asserted claim. Either of the parties herein
      shall be entitled to request the trier of fact in any dispute, litigation or
      arbitration between them, to determine which of the parties is
      "prevailing."

    


    9. Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which together shall constitute one
      instrument.

    


    
      	 	 	 	
              vFinance,
                Inc.

            
	 	 	 	 	 
	
              By:
                

            	
              /S/
                LEONARD J. SOKOLOW

            	 	
              By:

            	
              /S/
                ALAN B. LEVIN

            
	 	
              Leonard
                J. Sokolow

            	 	 	
              Its
                CFO

            


    

    


    
      
         

      

      
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